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High gas prices hurt. But here's how diesel prices are slamming your wallet in hidden ways

Ronald D. White, Los Angeles Times on

Published in Business News

LOS ANGELES — If you're wondering what's swelling the price of everything you buy, the cost of a gallon of diesel is a good place to start.

Record gasoline and diesel prices across the country are a major contributor to the kind of inflation not seen in 40 years, and it's worse in California, where both fuels cost more than anywhere else in the country.

For motorists, every visit to the gas pump brings a fresh helping of pain. But consumers also should worry about how diesel, something most people never buy, is quietly denting their wallets.

That's because diesel runs the world's economic engine, and the fuel's price has soared faster and higher than gasoline.

"People should be very concerned. This will ripple through the economy," said economist Philip K. Verleger Jr., who has analyzed energy markets for more than 50 years.

Gas and diesel have been dragged higher by oil's steep rise after Russia invaded Ukraine and the U.S. banned Russian petroleum products. Brisk demand for both fuels has added to the jump.

 

The U.S. diesel price jumped Monday to $5.57 a gallon, up from $3.25 a year earlier, according to the Energy Department's weekly survey, although big trucking operations have some protection from sudden price surges through contracts with suppliers.

In the U.S., trucks and trains are the biggest diesel users. They move most of the products consumers use as well as raw materials headed to manufacturers, building sites and the like, Verleger said, putting upward pressure on prices all along the supply chain.

Diesel also powers major sectors including agriculture, construction and manufacturing. Even your favorite food truck is probably running on diesel, which is going to make your mobile comfort food cost more.

To understand how diesel prices are hitting consumers, look at trucking operations such as Liberty Linehaul West.

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